Jack Welch Leadership and Business Success
Jack Welch (1935- )
American boss (pictured right) of General Electric (GE) 1981-2001, founded by
Thomas Edison (pictured right
below) and producer of light bulbs, aircraft engines, plastics and electricity generators.
Time magazine’s manager of the twentieth century for transforming GE into the world’s
best and most valuable company.
What are his tips about leadership and business
1. “Control your destiny or someone else will”
If you don’t keep on satisfying customers, they will buy from your competitors and people will lose their
“The company can’t give job security only customers can”, he said.
2. “Change or die”
Keep on changing and improving before customer dissatisfaction forces you to (see point 1).
It is better to change early when it is still painful (“painful opportunism”).
Always challenge people to:
- get out of the comfort zone.
- strive for better and better performance (see point 3).
He wanted GE to have the creativity and flexibility of a small company, and so a leader’s job is “to
create, not to control”, he said.
This was the system that Welch introduced to challenge managers.
Their actions were openly challenged and scrutinized by:
- external stakeholders like customers and suppliers.
4. Vision and purpose
He clearly communicated his vision of a customer oriented, world-class global company.
On arrival as chief executive, he told employees: “I want a revolution” because of the
value he placed on big changes.
5. Ruthless and decisive
Nicknamed “Neutron Jack” by the press (the neutron was a nuclear weapon), he reduced GE’s workforce by
118,000 between 1980 and 1985 to make the company:
- less bureaucratic and costly.
- more adaptable to change.
His policy was to “fix, close or sell” any business which was not number one or two in the
love” and honesty
The best leaders have the 4 E's:
- edge (to make the
- the ability to energize (getting people to do great
things) and execute (getting results).
These attributes are reflected in his philosophy of
“tough love” i.e.
you have to be:
- fair and kind (he
sent out personal notes of encouragement), but
- firm and tough (taking difficult decisions and being honest about people’s incompetence - see point
Each year he fired the bottom 10% of employees (as GE still does) to encourage
high performance from the people remaining.
“You’ve got to be hard to be soft”, he said.
7. Empowerment and good people
He encouraged employees to:
a) take responsibility
(for achieving the objectives that managers set them).
b) be high performers.
(and technically competent).
c) work effectively in teams.
d) believe in the company’s values.
(customer orientation, integrity, empowerment, quality, globalization and a passion for change and
8. The “boundaryless organization”
This means making the organization more open and communicative by:
- breaking down barriers between people (particularly in different departments and
- creating closer relationships with customers and suppliers.
9. Be realistic
- face reality (like competitors’ strengths).
- don’t kid yourself that things are what they were, or what you would like them to be.
He made GE into a learning organization that
learns from other companies and its own successes and failures.
So he strongly supported:
- the disclosure of information.
- the company’s management training centre at Crotonville, New York state.
11. Competitive advantage
Make sure you are better than your competitors on image, price and
So in the mid-1990’s he successfully introduced:
- the objective of six sigma i.e. fewer than 3.4 defects in a million.
“If you don’t have a competitive advantage, don’t compete”, he said.
Products must be developed and sold to customers as quickly as possible.
So managers must:
- be speedy in their decision making.
- keep things as simple as possible.
“Do it faster next time”, he always told them.
13. Measure performance
He said only three things need measuring in any business:
14. The will to win
Like the company he created, he is incredibly competitive and determined to be the best, successfully overcoming
the handicap of a slight stutter.
His mother taught him to love success but cope with failure.
Key quotes on
Change before you have to.
Change or die
Control your destiny or someone else will.
Key quote on
The company can’t give job security only customers can.
Key quotes on competitive
If you don’t have a competitive advantage, don’t compete.
An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive
Key quote on
Getting the right people in the right jobs is a lot more important than developing a strategy
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Before you are a leader, success is all about growing yourself. When you become a leader, success is all about